Implementing the French Duty of Vigilance Law: Reflections Shared by Michelin, Sanofi, Total and Vinci

How can companies carry out “effective” and “reasonable” human rights due diligence which is meaningful in practice and complies with emerging laws? This was the title of the session I had the pleasure of moderating for the International Business and Human Rights Conference hosted by the International Organisation of Employers, the French Business Confederation MEDEF and Sodexo in Paris in April 2018.

The backdrop for this session of course was the recent French devoir de vigilance law which requires large French companies to undertake human rights due diligence and publish how they do so in a vigilance plan. The soft law contained in the UN Guiding Principles on Business and Human Rights (the Guiding Principles) that underpins the French law describes what is understood by human rights due diligence (HRDD). HRDD is an ongoing risk management process that enables a company to identify, prevent, mitigate and account for how it addresses its adverse human rights impacts. It includes four key steps: assessing actual and potential human rights impacts; integrating and acting on the findings; tracking responses; and communicating about how impacts are addressed. Engaging with potentially impacted stakeholders is a theme that cuts across HRDD.

So we know what HRDD means in theory. But what does HRDD mean in practice? And how are French companies undertaking HRDD in a way that seeks to respond to the expectations of the French Duty of Vigilance law? These are the questions that we explored on our panel with companies Michelin, Sanofi, Total and Vinci. The conference was subject to the Chatham House Rule and therefore this summary captures key discussion points without attributing reflections to any one company. This summary is intended to help other companies who are considering how to implement the French law.

We first discussed the fact that the French law has not necessarily been the trigger for this work: a number of companies have been advancing on integrating consideration for human rights into their business processes for a number of years. Each company will have a different reason for initially starting to pay attention to human rights. For some companies, it can be an externally-imposed force, such as a lawsuit or a complaint lodged with a non-judicial mechanism like a National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises. Other companies have created their own ‘burning platform’ to kick start the journey. This has been done, for instance, by bringing an external expert in to discuss the importance of the topic with the company’s Board of Directors, soliciting views from stakeholders on a materiality map and ensuring that human rights is included in this discussion or soliciting input from investors who are focused on the company’s longer-term sustainability.

A key takeaway for companies responding to the French law is that if the law isn’t a sufficient impetus to kick start a meaningful process of human rights risk management, consider the full array of other factors that warrant paying attention to human rights impacts. Even for those French companies that are not technically subject to the law, it makes business sense to be able to demonstrate evidence of a human rights risk management process. This in turn helps companies become privileged business partners in the value chain of larger consumer-facing companies that are subject to the surge in human rights-related laws, investigative journalism and enhanced scrutiny by millennial consumers of corporate activities taking place overseas.

We then discussed examples of concrete actions companies have taken to move forward on human rights due diligence, and lessons learned in the process. Although each company’s method for integrating respect for human rights into its business will vary depending on the company’s set-up, values, existing processes and operating context, there are a range of lessons learned that emerge from this work that are applicable to a fuller range of companies. In particular, companies shared the importance of:

Adopting a cross-functional approach. No one department can do this work alone. A company can impact on people in a range of different ways and human rights due diligence requires ownership by all existing business functions. This can be supported through the creation of a cross-functional committee or more informal measures that encourage cross-functional dialogue;

Building on what you already have in place as a company. Where a company has a specific process, terminology of risk, or set of values in place, the human rights discourse should be built onto this. As much as possible, human rights due diligence should not be viewed as a separate process;

Using an overarching human rights policy as an entry point to discussions with other functions. A broadly-drafted policy can open the door to a range of meaningful conversations within a company, with particular functions being provided the opportunity to discuss in practice what human rights mean for them on a day-to-day basis;

Translating human rights on a function-by-function level. The way in which the legal department can inadvertently infringe upon human rights will be very different to the way in which procurement, sales or marketing can infringe upon human rights. It is paramount to translate human rights specifically to functions to help employees see how their decisions and actions could impact negatively upon people. This can be done through workshops, guidance notes and revisions to existing business processes;

Determining one’s own salient human rights issues. These are those human rights at risk of the most severe negative impact through the company’s activities and business relationships. External stakeholders may push a company to focus on child labour or modern slavery, for instance, where the company knows that due to its business organisation its most severe human rights risks lie in the areas of discrimination, wages or worker housing. Having a rigorous process to determine a company’s salient human rights issues will assist the company in staying the course when external pressures push for a focus on the latest issue of the day;

Engaging in advance with non-governmental organisations and other stakeholders that have insights into how impacts are lived and perceived by those interacting with the company. Early engagement is vital and brings value to the company in terms of better identifying and addressing human rights risks. It is also helpful to have this network of ‘critical friends’ to draw upon for assistance when impacts do occur; and

Tackling issues in coordination with others. A number of human rights issues faced by companies operating overseas cannot be tackled alone. They demand collective action with other companies and frequently require the active participation of the government. There are a range of different ways in which companies have worked with other companies and governmental actors and examples of collective leverage to address particularly challenging and salient human rights issues are on the rise.

A key takeaway for companies responding to the French law is to build on lessons learned from companies that have been working on integrating human rights due diligence into their business operations since the Guiding Principles became soft law. Although each company will have specific ways of seeking to respect human rights, learning from what has worked and what hasn’t for other companies can help jump start the process.

The discussion concluded with reflections on the value of the French law. Companies noted that the law had helped bring rigour to the process of human rights due diligence, enable the active participation of a broad range of functions and ensure renewed attention to these issues.